AI Wisdom Ep. 5: Tackling the Insurance Talent Crisis with Kirstin Marr

Digital Transformation - December 4 2019

On this episode of the “AI Wisdom – Talking Innovation in Insurance” podcast, host Ron Glozman, CEO and founder of Chisel AI, speaks with Kirstin Marr, President of Insurity Valen Analytics and one of the pioneers of the Insurance Careers Movement coalition, about the looming talent crisis in the insurance industry, the link between Insurtech and attracting new talent, and what insurance has to offer millennials and post-millennials. Click the link to listen or read the full transcript below.

 

Full Transcript

 Ron Glozman: Hello, and welcome to “AI Wisdom – Talking Innovation in Insurance.” On this podcast, we talk to business and insurtech leaders about how artificial intelligence is transforming the way we buy and sell insurance. I’m your host, Ron Glozman, Founder and CEO of Chisel AI and a strong believer in the power of AI to help people work smart and enrich their lives. So, let’s get into it.

As insurance companies seek to replace their aging workforce, new thinking and new approaches will be needed in order to lure the interest of the next generation worker. Individuals born between the mid-1990s and the early 2000s, dubbed Generation Z, have never known a non-digital world. They are the first generation of true digital natives. They have fully embraced the availability of many on-demand services like Netflix, Uber, Airbnb, and more, and think nothing of ordering goods and services online. According to a recent article in Insurance Journal, almost half of insurance industry professionals are over age 45. What’s more, they’ll be more than 400,000 open positions by 2020. And with only 4% of millennials interested in a career in insurance, according to a survey from Hartford, reeling in the attention of this growing population of Gen Z will require insurance companies to re-examine and digitally transform how they do business today.

With me today, I have Kirstin Marr, who is the President of Insurity Valen Analytics and a founding member of the Insurance Careers Movement, probably the best person or one of the best people to speak to on this topic. Thank you for joining us, Kirstin. Please tell us a little bit about yourself.

Kirstin Marr: Well, thank you, Ron, for having me on today. I really appreciate the opportunity to be able to speak with you and reach your audience. I’ll start with a brief introduction to Insurity Valen Analytics. We are data analytics firm that offers insurers and insurance organizations a better way to understand the risks that they insure for risk selection, pricing, claims, and any area, really, along the decision-making points that underwriters, claims, adjusters and others in an insurance organization have to make, so those decisions can be better informed and they can provide better, faster service for their clients. So, that’s Insurity Valen Analytics. I’ve been with Valen for just about eight years. I spent the first six years as the Chief Marketing Officer, really elevating both Valen as a company, but also just the concept of data and analytics within the insurance industry.

You know, eight years ago, it was still a few carriers, the early adopters, really using it. It hadn’t really gained mass adoption like you see today. So, we spent a lot of time just helping executives understand how data and analytics solve business problems that they care about.

“Very few executives and business professionals want to talk about algorithms. They just want to know how to solve business problems, and how data and advanced analytics can help them do that in a better way.”

And then we were acquired by Insurity in January 2017 – Insurity is a leading digital software provider – and I took over as President in 2018. So, that’s a little bit about me.

Ron: Amazing. And can you just tell us a little bit about the Insurance Careers Movement and what it means and stands for?

Kirstin: Yeah, absolutely. So, the genesis has something to do with what we were just sort of talking about, in terms of helping the insurance industry really understand how some of these advanced technologies help solve fundamental problems in insurance or just move the industry forward and allow the industry to grow in new areas. For instance, in commercial, there’s a lot of talk about small commercial. I'm sure we’ll talk about that more. And as we looked at, you know, building momentum around advanced data and analytics, it was really clear that insurance companies didn’t have the talent on their side of the table to really understand the nuances and the intricacies about how to implement advanced analytics and other data solutions within their own organization. And so, as we were in that sort of education mode, we thought: How can we contribute to the insurance industry by making it more attractive for the younger generation and also people with more of a data-technology-analytics bent to want to join the industry?

“One of the things I say often is, Facebook is invented, Google is invented, but insurance is reinventing itself. And it’s actually one of the hottest tech places to be in. It’s a place where, as a young professional who is very tech-savvy, you have the opportunity to come, and invent, and create an industry that truly is reinventing itself, and just doesn’t know how to tell that story very well.”

So, we set about to create some partnerships around helping the industry better tell this story. We thought it was in our best interest. And we also knew it was in the industry’s best interest. And so, we started partnering with organizations like the Jacobson Group, which is a recruiting and HR firm dedicated solely to the insurance industry. We partnered with APCIA from the very beginning, who really helped us reach insurance executives with this message about how to come together since that’s a lot of what APCIA does. And then we had lots of other organizations join us – InVEST, the Institutes. And we just started on a basic awareness campaign. How do we get statistics like what you just outlined? Those statistics are some that we started with when we started this about five or six years ago. How do we get a common language around the problem, size the problem, and understand what we can do in terms of solutions?

And then we had you know people like Hamilton Group. So, Brian Duperreault had come out of retirement to found Hamilton Insurance Group and his Chief Communications Officer, Wendy Davis Johnson, found us. And we really started gaining a lot of momentum once we had Hamilton and Brian come on board.

“One of the things we understood was that, if this was going to gain traction, we needed to make it an executive-level strategic issue. This is a CEO issue. It’s not an HR recruiting issue. This is an industry branding issue. And we needed to elevate it to that level.”

So, once Wendy and Brian Duperreault came on board, then we had a lot of other marquee CEO ambassadors come on board, like Mike McGavick, formerly of XL Catlin, Mark Watson of Argo Group, Inga Beale, who was at Lloyd’s at the time, Dan Glaser of Marsh & McLennan, and others who decided that they wanted to add their voices and really rally the industry around telling a different story about insurance. And one of the big things that our CEO ambassadors pushed, with Brian at the forefront, was:

“Let’s put young people as the face of the industry. It shouldn’t be people, you know, who are most of what you described, the majority of the industry later in life, talking to young people. We should create a storytelling mechanism where the people who we want to attract to the industry hear from people who look like them.”

So, we started on that. We created February as Insurance Careers Month. So, every February, it’s an annual kickoff for the industry to really tell that story and think about their annual talent plans, about how they’re going to reach young tech-savvy professionals. We have grown that to our first year. We had hoped to get maybe 200 companies and we got 600 companies involved. There are now over 1,000 insurance organizations in 30 countries who participate with us every year and it’s a grassroots movement. There are no fees or anything to join. It’s just really a coming together and a way to maybe create an umbrella collaboration over all of the great initiatives that happen in the industry. And the Insurance Information Institute and AM Best have come on as pillars in helping us really drive it forward. So, it’s that collection of organizations that really has come together to drive the results we see today.

Ron: I'm very happy to hear that February is insurance month because that’s my birthday. So, I think it’s a great month to be celebrating insurance! [Laughs] So, I mean, you talked a little bit about this, but what creative approaches and strategies are you seeing out there in the market that companies are using to attract new talent into the industry?

Kirstin: Yeah, it’s a great question. And I think one of the things you can do is look at one of our other marquee partners, which is Gamma Iota Sigma. They are basically an insurance fraternity sort of organization with, I think, around 80 college campuses around the country. And they have an entire network reaching out to people who are interested in insurance, who may be choosing career or college tracks around risk management. But they’re growing and expanding so much more beyond that. And they’re really helping all the rest of us understand how to engage with young professionals in a way that resonates for them.

“And when you see the students that are part of Gamma Iota Sigma, you realize that’s really kind of the cradle of future leadership for the insurance industry. They're incredibly impressive young people.”

And Gamma Iota Sigma does such a good job of telling the story of insurance, and getting them engaged, and getting them to understand what amazing opportunity there is here, and how much senior executives within the insurance industry are motivated to leave the industry in better shape than they found it. And they want to make sure that they’re leaving their legacy and what they’ve been able to do in the insurance industry to the next generation. So, I'd look to examples like Gamma Iota Sigma, who understand you have to have a digital presence, but you also have to have face-to-face communication, you know, on college campuses, at different career events.

“You have conferences where you bring young people together and have them mix with industry professionals. I would say they're a great example for a lot of us to follow.”

Ron: Have you found in your experience that, you know, people today view insurance as an unsexy, sort of uninteresting, routine, mundane industry to go into? As we talked about earlier in the introduction, only like 4% of people today are interested in insurance. And if you look at fraternity statistics, it’s interesting because, you know, it’s 3% of people go into a fraternity. So, the math lines up.

“What can we do to make the industry appear less, you know, boring? Because for people who are inside and know all the complexities and nuances of the business, it’s actually very, very complex and interesting. And you could spend multiple lifetimes working in different product lines and still not cover the whole industry.”

So, what are you seeing out there that's happening to counteract this appearance of sort of uninterest?

Kirstin: Yeah, I think you’re hitting right on the right point, Ron. It’s unfortunate, but it’s the reality that the story that we want to tell, that those of us in the industry see every day, is not the story that’s understood outside of the industry.

So, every year, Valen produces a survey around underwriting analytics and also talent. And we ask insurance executives, “How hard is it for you to attract tech data analytics talent?” And, you know, just about three quarters, 75%, of insurers say it’s difficult. It’s difficult to recruit them. And we ask them why. And the top reason actually is geography or the location of insurance organizations. So, you know, I think that’s an interesting one for the insurance industry to figure out with virtual workforces growing. That certainly could be an answer there.

But the other big reason is certainly just a disinterest, as you mentioned, in the industry and not really understanding the opportunity. You said some things at the opening that I think help us think about how to craft the story. You talked about this generation, and they’re digital natives, and everything that they do in their personal lives to engage with businesses as consumers. And there’s just this disconnect that we have to figure out how to communicate. So, when life changes and when technology changes our behavior in such dramatic ways, the insurance industry has to respond to that.

Let’s take the example of ridesharing. So, if you have a car and you drive for Uber or Lyft, you’re constantly mixing your use of your car from personal to commercial use cases, and you may even be switching between different companies if you drive for both of them, which happens a lot. How does the insurance industry enable that sort of technology?

“Insurance actually does a lot to enable all of these technologies to thrive. If you think about it, what does a new technology company need in order to get started and to change an industry? It needs financing. It certainly needs, you know, good energy, but it needs insurance. Nothing’s going to move forward, unless it’s insured.”

We’re just not connecting the dots for people about how much the insurance industry is dealing with this rapid change, and enabling these technologies to grow, and get to scale.

I think if we can start to point that out and connect the dots between the life everybody’s living and how they’re interacting with businesses, even in their own personal life, in their homes, in their cars, and how much the insurance industry is actually behind that and enabling that, I think that’s one answer that we need to sort of figure out.

Ron: I love that example. I think that’s a great example of multi-use, mixed-use potentially cross-company. And the one thing that I, you know, get the opportunity to hear a lot about and think a little bit about is autonomous vehicles. And when you interlay that into the equation, it’s then, you know, who’s on the hook when it comes to an accident? Is it the manufacturer of the vehicle? Is the manufacturer of the software? Is it one of the actual companies involved? So, I think it’s going to be a very interesting space and that’s part of what excites me: There will be an opportunity for people to have an impact because I think a lot of these things, especially with autonomous vehicles, are going to both make our lives, hopefully, a lot better, easier, and more environmentally friendly, etc. And at the same time, they also offer opportunities for people to have an impact and make decisions that will, you know, impact the way people around the world potentially travel.

Let’s switch topics a little bit. What skills does the insurance industry desperately need in order to stay relevant, innovative and to really provide the kind of service that customers today are demanding? What skills do they potentially not have or could have, and potentially the Gen Z’s are the ones that have them?

Kirstin: Yeah, it’s a great question with a lot of rich material to talk about. Let’s just talk about two different roles that are very traditional to the insurance industry: actuaries and underwriters.

“So, actuaries play a really important role within the insurance organization and have to do all the rate making and reserving, which is critical to the stability of any insurance organization. Actuaries and the field of actuarial science is really evolving to include more data science and to include more forward-looking statistics at a transactional level, which is typically not where actuarial science is played.”

So, that whole field and the makeup of actuarial teams is changing in such a way where young professionals who are studying mathematics, and data science, and advanced statistics now have a real career path within insurance. And if you do any searches around growing careers, stable careers, which young professionals care a lot about, actuaries are always at the top of that list across insurance and other industries. And so, it’s a great one for young tech-savvy professionals to take a new fresh look at where the field of actuarial science is going.

And then we can take a look at underwriters who are really good at understanding the markets that their company serves. They’re experts. They know how to serve the agent and the policyholder, build a business, and grow a portfolio. And so, they have this amazing mix of market-focused and customer-facing skills, plus having to understand how to assess risk on the fly.

We always say, you know, every underwriter has a predictive model inside of their head. They have to be able to analyze very complex risks and figure out how to write the appropriate risks that fit their book of business and price it in a way that makes sense for the organization, but also makes sense for the market, and for the very important relationships they have with their agents. The role of the underwriter is changing and it’s really about that mix of art and science when it comes to underwriting.

So, it’s how do you start to take advanced data analytics and look at them as power tools that you’re leveraging to improve your own decision-making. Whenever we work with carriers and underwriters, we say this is not about the data telling you what to do. It’s not about turning your brain off. It’s about turning it up.

“The underwriter of the future is going to be much more data and analytic driven than they are even today. You see that happening right in front of us in the industry. And so, it’s going to be a much more tech-driven role as we move forward.”

Ron: Love it. We’re gonna take a 20-second break to tell you where you can find more information and insights about insurance innovation. We’ll be right back.

[If you like this episode of AI Wisdom, subscribe to our blog, “Writing the Future: AI in Commercial Insurance” at www.chisel.ai/blog for feature articles, interviews, opinions, and more.]

We’re back with our featured guest, Kirstin Marr. Let’s jump right into the next question. We’ve spent quite a bit of time talking about the skills and the need to attract younger generations into the insurance industry, especially in the face of the coming retirement for a large population. One of the technologies that we have chosen to spend a lot of time working on is artificial intelligence. And I know we’re not the only company in the world working on that. Now, how do you see AI playing a role in attracting this talent?

I sort of see two interesting things that I’d love your thoughts on. One of them is on the recruitment side. So, it’s the ability to get them excited about, you know, coming to work in the insurance industry. A lot of times, when people think about insurance, they’re thinking about pen and paper, and email, and really physical work. And AI is allowing that opportunity to digitize, and automate, and actually make some of that work a lot more interesting.

And then on the flip side, it’s about the need to actually have potentially less people in the industry. The Industrial Revolution caused people to move from agriculture centers into the city. And we now have, you know, 2% to 3% of the population being farmers, feeding more people than ever before. Do you see something like that happening in the insurance industry as well?

Kirstin: You know, it’s such an interesting conversation to have. If you look at, as people call it, the fourth age, the Fourth Industrial Age, if you look at the other three, and you were just talking about one of the really big ones, it comes with a contraction in some areas and an expansion in others. So, doors open in different areas: where they close in one area, they certainly open in another. And I think you’re going to see that across insurance. But, again, you know, one of our themes we’ve been talking about here today is look at the macro environment with which, you know, insurance lives. And AI is, you know, one of the biggest changes and trends we’re going to see across all businesses, across all industries, in the way that we work and live. And so, it opens up really interesting opportunities for those who think about risk. So, the very nature of the risks the industry insures today are going to be quite different 5 years from now, maybe 3 years from now, certainly 10 years from now.

You talked about autonomous vehicles. You can look at just overall automation of the workforce. So, if you are a commercial lines insurer, what do you think about in terms of workers’ compensation insurance, as one example? When workers start to change and AI starts to mix with the human workforce, what does that do for the very nature of insurance?

“Within insurance organizations, the one really exciting thing about AI is it’s really finding proven business use cases that insurance executives are rallying around. You see a lot of insurtech technologies that are interesting but can be categorized more as solutions looking for problems, whereas AI is really starting to find its stride in terms of how it helps insurance organizations do things better, faster, cheaper.”

Customer service is a great example, in terms of the use of AI. Claims certainly is probably one of the biggest areas where we’re going to see AI technology take off.

And so, you can look at a constricting workforce in certain areas where routine tasks certainly will be automated and staff reductions in those areas make a lot of sense. But it also opens up a lot of opportunity for growth in, you know, companies actually hiring and having full digital staffs.

“And, you know, companies like Argo don’t look at their digital team as separate from the rest of their insurance organization. Their digital team is sitting next to underwriters, is sitting right next to claims adjusters, is sitting next to everyone with “traditional roles” within an insurance organization. And so, if you’re a young, tech-savvy digital native, you should see insurance as a growth industry, not one that would be constricting. That’s at least my view.”

Ron: I love that view and I completely back it. You know, I love to ask this question when I go into an insurance company: Why or how did you end up in insurance? And most of the time, the question that they answer isn’t why, but how. Most people say, you know, they sort of fell into it. Somebody once told me insurance is like a black hole: Once you get near enough, it just sort of sucks you in, and you never see the light of day again. [Laughs]

So, if there was one piece of wisdom that you would give to peers in the industry who are looking to improve their existing employee engagement and attract new talent, what would that one piece of wisdom be?

Kirstin: Yeah, that’s a great question. What I would say is you really have to enable this next generation to make decisions and to innovate and invent within your organization. You need to give them something that they can lead, that can drive outcomes. Lots of companies talk about having innovation labs or sandboxes and all of that’s good and, you know, having young people participate in that is good.

“But the young generation, they’re very smart. They’re very savvy. And if you can give them something that they can own and run with, they will own and run with that. And, you know, you start small and you start in an area where you can accept failure. That’s hard for insurance organizations. You have to be able to promote and even celebrate failures on a small scale because they lead to big successes, longer term.”

And you have to figure out how to retain your top talent. So, one of the things that’s happened with Insurance Careers Movement driven by APCIA and AM Best is this Emerging Leaders Conference. So, it now takes place every February. And what happens with the Emerging Leaders Conference is that insurance executives nominate an emerging leader within their organization, someone that they really wanna rally behind and groom to be the next generation of leaders. And only 80 of those nominations get selected to participate in this Emerging Leaders Conference.

We did the first one in 2019 and it was such a big success. And what you saw was, you know, CEOs and C-level executives at this event with their emerging leaders, who were nominated and accepted into that conference, really talking about how to move the industry forward and bridge the generational gap. And a lot of what came out of it was they had the latitude to own something and run with it. So, that would be long-winded, but that would be the one piece of wisdom that I would share.

Ron: I think that’s a great piece of wisdom. Now, if an organization wanted to get involved with Insurance Careers Movement, how would they go about doing that?

Kirstin: It’s very simple. You just visit the Insurance Careers Movement website, which is insurancecareertrifecta.org and literally sign up for the forum. You’re on the list, you’re in the club, you’re in the group. You get the communications and all of the materials that you need to join the movement. It’s really that simple. For organizations that want to get more involved, they can connect with Marguerite Tortorello, who is our amazing managing director of the Insurance Careers Movement. And she helps organizations that want to get even more actively involved, but it’s literally that simple.

Ron: Simple is the key, and I think you said this earlier, but just for those who may have missed it, it’s free. That’s the best type of organization because they’re all in, and not to make money, but to actually have an impact and move the dial on this industry.

Kirstin: That’s right. It’s very grassroots.

Ron: Yes! And so, the final question that I love to ask people to wrap up on is, if you were to dust off your crystal ball and look five years in the future, do you think the insurance industry will overcome the talent crisis?

Kirstin: That’s a great question. Put me on the spot. I love it. I don’t know that we will have totally overcome it in the next five years, but I expect the dynamic to change quite a bit. And I’ll tell you why I think that. If you just look at the insurtech space, and for those who are at InsureTech Connect this year, I think they would agree that they’re seeing the same evolution. So, if you just look at the insurtech movement, I mean, there’s thousands of companies, startups, trying to provide technology services to the industry and improve it in some meaningful way. What you saw early on were more of what I talked about before, which were companies that have very cool tech ideas, but very little knowledge of insurance and how it would help solve real problems in the industry. This year, we saw a very clear divide and evolution, if you will, just in the technology ecosystem of insurance. And you’re starting to see a lot more companies getting traction, getting beyond proof of concept, getting to scaled solutions because they figured out how to be real business partners within the insurance industry.

“And as you see that sort of maturity take place, that level of technology maturity is going to attract more and more young people. It's the right face, as we talked about before. It's people who are going to look, and feel, and have experiences like the types of talent that we want to attract.”

They’re going to be hiring a lot more people. And just that momentum and buzz in the industry is quite a powerful PR tool. That along with what insurance companies are doing to innovate and, you know, a lot of them have their own investment arms, and they’re getting much more serious about placing bets within their own organizations and also supporting technology startups. All of that buzz is going to reach a critical mass, certainly within the next five years that I think changes the dynamic quite a bit. And when we’re talking, even five years from now, Ron, I think we’re going to be talking about a much more promising talent pool than what we necessarily see today.

Ron: I think that would be a great follow-up episode. We'll set up a reminder for five years from now. And we can see. I would agree with you. I don't think it’s binary. I don't think it’s ever like, “Are we over the hump?” I do think we will have made significant strides to improve the ratio. And I think also the interest and the view of the industry is going to change. You talked a little bit about insurance companies and VC arms.

“But if we talk about VC, in general, insurtech is one the hottest areas right now. We will see over the coming years, several startups, knock on wood, who will become, you know, unicorns, billion-dollar-plus companies. And they’re going to be companies that actually have an impact. Hopefully, we’ll also attract new blood and energy into the industry.”

Kirstin: That's right. Come join us!

Ron: Yeah, come join us. So, thank you so much for taking the time. Where can people find you if they want to follow up? LinkedIn? Twitter? Where’s the best place?

Kirstin: Yeah, absolutely. Both on LinkedIn and on Twitter, and at valen.com.

Ron: Awesome. Thank you so much for joining us. Thank you all for listening and enjoy the rest of your day.

Kirstin: Thank you, Ron.

Ron: That's a wrap for this episode of "AI Wisdom - Talking Innovation in Insurance," hosted by Chisel AI and me, Ron Glozman. Thanks for listening. If you like our podcast and wanna hear more, check us out at www.chisel.ai or tune in and subscribe wherever you get your podcasts: SoundCloudiTunes or Stitcher. Join us next time for more expert insights and straight talk on how AI and insurtech innovations are transforming the insurance value chain. See you on the next episode!

 

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